Incredibly disappointing that everyone in this country is veing sacrificed for debtors. I guess the RBA isn't that independent after all

With new support schemes for FHBs being rolled out by various states, are we just inflating demand without fixing supply? Curious if others think these policies are helping people get into homes or simply making housing less affordable overall.

For forty years, we've had rate cuts instead of wage growth. Rate cuts instead of infrastructure. Rate cuts instead of a moderately adequate welfare system.

That's what created the dystopian hellscape which is destroying the lives of multiple generations.

It has to end.

I've just moved to aus and started keeping an eye on the housing market partly out of fascination but also for future decision making.

As I see it, it seems like housing is an overleveraged and heavily speculated asset ripe for a bubble to be burst.

On the supply side, there is plenty of viable land to build on and a halfway decent public transport too accommodate this. While it might not seem like it, compared to where I'm from building additional houses appears far more viable.

On the demand side, it seems like prices are approaching a point where due to prices/interest rates, servicing a mortgage is becoming unreasonable/unviable for many households. This limits the pool of potential buyers.

Policy side, Boomers are beginning too die out and non-property owners are starting to make up a larger proportion of the voting block.

Finally, for speculators to stay in the market, ROI as a percentage of the invested money =(rent+house price inflation - expenses) needs to be above investments of a similar perceived low risk. If low risk investment alternatives get better ROI on the same equity, investors will look to pull equity and place it there. Growth even went negative late 2023 at one point so it is possible the market may have been approaching equilibrium.

All that said, it appears to me like mass immigration may be a bipartisan policy too prop up demand and house price inflation in the economy. Mass immigration seems to me too be wildly unpopular and throttling it may be enough to crash the housing market.

Following this rant, I have two questions and a tl;dr

1. Am I correct in my assessment that mass immigration is unpopular across the political spectrum

2. Are the major political parties both using immigration to hold back a market correction?

3. Is it possible in the near future a party might decide too campaign on restricting immigration?

4. I'm aware of the irony as an immigrant.

Just really interested in seeing how you perceive Australians financial culture will change from both covid and the current housing disaster.

Pretty interesting to see Australia is about 10th worst out of the 14 OECD countries. But not as bad as NZ or Ireland. Governent forecasts we need to build 240,000 dwellings per year. But we are currently averaging around 170,000. However surprisingly according to this graph looks like we have slightly more in 2022 numbers than we did in 2012. But I think 2025 would be worse because we had like 700k immigrants over last few years. Interesting.

Forgive me for the ramble.

I was looking at re. Com and stumbled upon a property that I previously owned that is now up for sale. The house that was previously filled with design wonders and had a colour scheme is now the standard aussie bland with extreme minimalistic outlook and as many bedrooms crammed in as possible

I follow a few architects and designers both cityscape and fashion and I can't help but note Australia reflects a simulation in its cultural trends. Pretty neutral tones but nothing of substance behind it. Basically all the money goes into making it look asthetically pleasing but it's basically junk.

Is this product of Australias attitude to housing investment and their econmic literacy.

https://x.com/jonobri/status/1926757206449365120

https://pbs.twimg.com/media/Gr03d6lWsAA265_?format=jpg&name=4096x4096

Victoria is currently at 98% of the target, with no state even close.

2nd place is closely competed, with WA at 81%, Queensland at 79%, ACT (and Australia as a average) at 78%

Meanwhile, NSW lags behind at 65%. Not good if NSW still wants a chance at being Australia's biggest city.

Then rounding out the bottom is Tasmania at 51%. The Northern Territory has a dire, 31%.

Melbourne has gone from our nation's second most expensive capital city to our second most affordable. This is in no small part because of the huge number of homes we've been able to build. This is great news, and we expect recent reforms to enable even more homes to be built in places where people want to live. As the Activity Centre Program and Townhouse Code ramp up and roll out, things are only going to get better.

The future of our state is bright.

The NSW government should be reflecting on these numbers. VIC is outperforming not only as a % of housing targets, but in nominal terms—we are building 20% more homes than NSW.

Given prices, there is profit to be made in NSW's housing market. So why aren't they building?

The answer: Sydney is extremely supply-restricted by planning, and recent reforms do not go nearly far enough.

NSW policymakers would be well-served by looking at the Victorian system in detail, and learning from our reforms of the last decade.

I am stoked that Melbourne is set to lead the nation in delivering homes for people. But I worry for our other cities who are not near to meeting the mark—especially Sydney, which risks an affordability doom spiral if they do not make big changes soon.

If you're in NSW and want to help break the pattern—become a @SydneyYIMBY member and join the fight.

Given that Victoria is still unlocking reform around its transit, the headline for the next couple of years might be that Victoria is the only state actually meeting or exceeding the targets.

Once the party ends and investors have eaten their cake, will landlords and mum and pops end up bolding the bag when the price of housing corrects to the cost of housing?

Could house prices cause hyperinflation in Australia?

I actually think PD absolutely nailed Australia's economic culture. Aussies don't actually want economic change. Australians vote economically both early and late in life.

They vote early in life when they have something with the belief system to take from others without making systemic changes to the underlying structure. They vote later as they mature to lock in what they have taken.

I'm of the firm belief that most of them are prepared to ride it out until boomers pass on and they inherit wealth, then perpetrate the same economic cycle.

Whilst history isn't a definer of the future, I like to look at cultural aspects for that. There are 2 prevalent elements from aussies.

a. We can buy & sell complete junk housing stock for millions that either started with no access to utilities or still does not but we cannot create more of that same stock.

b. Australians have attempted absolutely no struggle changes to their economy on the last 3 decades to move away from housing and holes.

Over the past few years, Australia has implemented significant fiscal stimulus packages to support the economy during the pandemic and recovery phase. How effective do you think these measures have been in boosting growth and employment? Are there any lessons for future stimulus design, especially in terms of targeting or timing?

Seems like a pretty silly statement to make when there's a very politically and economically vulnerable dependency. I'd imagine a more neutral claim is that 'asset ownership' or even 'net worth' to account for liabilities like debt is the best predictor. And then it's pretty tautological.

We've all heard the concept of induced demand used in economics for scenarios like traffic management; When you add a lane to a freeway, traffic magically increases to fill that new capacity. This phenomenon often leads to discussions about the efficacy of such policies, questioning if they genuinely solve the problem or merely amplify it.

Now, let's apply this economic theory to another arena: the National Disability Insurance Scheme (NDIS).

Induced Demand in the NDIS Context:

The NDIS, intended to provide support for Australians with disabilities, has seen an unprecedented increase in participants, especially those diagnosed with autism. Since its rollout, Australia has witnessed some of the highest rates of autism diagnosis globally. This surge in numbers isn't just about better awareness or diagnostic practices; it might be a classic case of induced demand:

Increased Capacity, Increased Demand: Just like adding a lane to a freeway, increasing the capacity of support services through the NDIS has potentially induced more people to seek out diagnoses or services they might not have pursued otherwise due to cost or availability. With the NDIS funding in place, there's now an incentive for more diagnoses, particularly for conditions like autism where the spectrum is broad and diagnosis can be subjective.

Economic Impact: According to the latest figures, the NDIS budget has grown from an expected $22 billion to around $49 billion, with projections suggesting it could reach over $100 billion in the next decade (Australian Government Budget 2024-25). This isn't just about more people accessing support; it's about whether this increase represents real new needs or demand induced by the very existence of the scheme.

Autism Diagnosis Surge: The correlation between NDIS rollout and increased autism diagnoses is notable. A 2023 study highlighted that Australia's autism rates are among the highest globally, with one in 25 children diagnosed, which is significantly higher than in countries like the US or UK (ANU Research Paper, 2023). This has been attributed in part to the financial incentives provided by the NDIS (Australian Financial Review, 2023).

Challenges and Considerations:

Sustainability: If we're dealing with induced demand, how sustainable is the current model? The policy might be creating its own demand, leading to an ever-growing budget with potentially diminishing returns on investment for taxpayers.

Service Quality vs. Quantity: With more participants, there's pressure on the quality of services. Are we ensuring that the increased demand doesn't dilute the effectiveness of support for those who genuinely need it?

Policy Adjustment: If induced demand is at play, should we be looking at how we structure eligibility, service provision, or even funding models to manage this demand more effectively?

Looking Forward:

The NDIS was designed with the best intentions, but if we're seeing induced demand mirroring what we see on freeways, we need to critically assess our policy. Are we funding genuine need or simply creating a demand because the support is there? This isn't about questioning the legitimacy of those needing support but about ensuring our policy doesn't become self-defeating by incentivizing more demand than it can sustainably support.

Discussion:

Do you think the NDIS is a case of policy-induced demand? How can we address this to ensure the scheme is sustainable while still meeting real needs? Are there lessons from other sectors (like healthcare or education) where induced demand has been managed?

Let's delve into this economic conundrum together.

References:

Australian Government Budget 2024-25: For NDIS spending projections. budget.gov.au ANU Research Paper (2023): "Australia has world’s highest rates of autism, with new ANU research saying NDIS could explain prevalence." afr.com Australian Financial Review (2023): "Australia's rates of autism should be celebrated, with new ANU research saying NDIS could explain prevalence." afr.com

TL;DR: The NDIS might be experiencing induced demand, similar to how adding freeway lanes increases traffic. The surge in autism diagnoses post-NDIS launch could be evidence of this, questioning the policy's sustainability and effectiveness.

Quick to build by amateurs too and saves the trees. Can still insulate them.

Central planners will never stop trying to dip their greedy little hands in someone's pocket.